MCY
MERCURY GENERAL CORP
Next earnings Jul 27, 2026 · consensus $2.43 EPS, $1.60B rev
Last earnings +2.1% on 2026-05-05
$110.48
▲ +3.06%$110.48▲ +69.69%
over 1Y
L $64.88H $110.48
Earnings Dividend Split Congress buy Congress sellGrouped by date · hover a pin to expand
Today+3.1%
1W+6.1%
1M+12.6%
3M+25.6%
YTD+21.2%
1Y+69.7%
Buy
Conviction
Horizon
Medium (3–12mo)
12-mo target
$•••
Street · 6 analysts
Buy
California auto/home insurer at 10.5x with a 22.4% ROE and recovering earnings — cheap, but wildfire/catastrophe concentration is the catch.
Diluted EPS $9.77 · FY2025
The read
Quality fundamentals and an attractive price line up (~166% below fair value) — the rarer case where both the business and the entry look good.
Mercury General is a California-concentrated personal-lines (auto and homeowners) insurer enjoying a strong margin recovery as rate increases earn through. FY2025 revenue grew 9.4% to $5.99B, net income rose 15.6% to $541M, and diluted EPS climbed 15.6% to $9.77. Return on equity reached an impressive 22.4%, equity grew 24.2% to $2.42B, and retained earnings rose 25.5% — the hallmarks of a hard-market personal-lines cycle where approved rate filings finally outpace loss-cost inflation. Operating cash flow was robust at $1.09B and cash jumped 82.7% to $1.32B.
The valuation is compelling at $102.67: just 10.5x earnings and 0.9x sales for a business earning a 22.4% ROE. Leverage is moderate at 2.96x liabilities/equity with only $575M of long-term debt, and the dividend ($70.3M) is comfortably covered, leaving room for increases.
Is MCY a buy? The one-page verdict, explained →
The options angle
model · matches our verdictBull call spread~60d expiry
- Long call 110 @ ~5.66 est
- Short call 122 @ ~1.57 est
debit $409max +$791max −$409BE 114.09
BUY verdict with defined risk: the short call finances part of the long one; max loss is the net debit.
Educational template, not a trade recommendation. Strikes and premiums are Black-Scholes model estimates from the last close and 30-day realized volatility — real chains, spreads and IV will differ. Options involve substantial risk.
Financials · annual, by fiscal year
| Line item | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | $3.99B | $3.64B | $4.63B | $5.48B | $5.99B |
| Gross profit | — | — | — | — | — |
| Operating income | — | — | — | — | — |
| Net income | $248M | -$513M | $96.3M | $468M | $541M |
| Diluted EPS | $4.48 | -$9.26 | $1.74 | $8.45 | $9.77 |
| Net margin | 6.2% | -14.1% | 2.1% | 8.5% | 9.0% |
Annual figures from SEC 10-K XBRL filings. Open the filing links below for full statement detail.
Key statistics
Valuation
Enterprise value—
EV / EBITDA—
EV / Sales—
EV / FCF—
P / FCF5.9
PEG (trailing)0.72
Earnings yield8.8%
FCF yield16.8%
Quality & risk
ROIC (est.)—
Free cash flow$1.03B
Total debt$575M
Net cash$741M
Piotroski F-Score6/7
Capital returns
Buyback yield—
Dividend yield (est.)1.1%
Shareholder yield1.1%
Shares Δ YoY+0.0%
Computed from SEC XBRL annual figures + the current quote. EV and ROIC use long-term + current debt where filed; estimates, not investment advice.
Disclosure timeline
SEC · 8-Ks + reportsRed flag in recent filings — agreement terminated (2026-06-24). Worth a closer look.
Recent filings
all on EDGAR ↗8-KPeriod ending 2026-06-242026-06-24open ↗8-KPeriod ending 2026-06-092026-06-12open ↗424B5Filing2026-06-10open ↗FWPFiling2026-06-09open ↗424B5Filing2026-06-09open ↗8-KPeriod ending 2026-06-092026-06-09open ↗8-KPeriod ending 2026-05-132026-05-14open ↗S-3ASRFiling2026-05-12open ↗10-QPeriod ending 2026-03-312026-05-05open ↗8-KPeriod ending 2026-05-052026-05-05open ↗4Period ending 2026-04-202026-04-22open ↗4Period ending 2026-04-202026-04-22open ↗
Frequently asked
- Is MERCURY GENERAL CORP (MCY) a buy?
- MCY currently carries a Buy rating with 3/5 conviction, derived from its latest SEC filings. California auto/home insurer at 10.5x with a 22.4% ROE and recovering earnings — cheap, but wildfire/catastrophe concentration is the catch.
- What is MCY's fair value?
- A Modified-Graham model based on MCY's SEC fundamentals estimates a fair value of about $293.41. It is an estimate from reported earnings, not a price target.
- Is MCY overvalued or undervalued?
- Against a Modified-Graham fair-value estimate, MCY currently appears undervalued relative to its SEC-grounded earnings power.
- What is MERCURY GENERAL CORP's quality score?
- MCY scores 81.2339552238806/100 (grade A-) on a SEC-grounded quality model spanning value, growth, profitability, financial health and momentum.
Sources: SEC EDGAR (CIK 0000064996, latest 10-Q filed 2026-05-05) · EODHD · Proprietary analysis · as of 6/21/2026, 8:58:52 PM.
About this recommendation — produced by TENK/calls (tenkcalls.com), Luxembourg · not investment advice
AI-generated analysis, produced by our proprietary engine from SEC filing data.
Investment recommendation produced by TENK/calls (tenkcalls.com), Luxembourg. Completed Jun 21, 2026, 4:58 PM ET. Ratings & methodology: definitions · All recommendations to date: track record · Conflicts: disclosures. Not investment advice.
Research and education only — not financial advice. TENKis not a registered investment adviser or broker-dealer and gives no personalized advice. Every call is impersonal — identical for all users, generated on a schedule from SEC filings plus a delayed/third-party price feed — may be wrong or out of date, and is not a recommendation to buy or sell any security. The operator and an affiliated trading operation may hold or trade the securities TENK rates; see Disclosures. Past performance does not guarantee future results. Do your own research.